Many buyers and sellers are closely watching housing market trends in 2026, as they try to make sense of today’s mixed signals. Mortgage rates are still elevated, home prices are below last year, yet homes are selling at a stronger pace than a lot of people thought.
Home sales are going up, even with higher mortgage rates, while home prices keep slipping because inventory growth is coming through from prior years. Demand looks better than last year, but price stabilization might take a bit more time. Keep reading to see what these patterns could mean for buyers and sellers in the coming months.
Are Home Sales Outperforming Last Year Despite Higher Rates?
Pending home sales increased 4.3% year over year in May 2026, marking the sixth consecutive month of annual growth. Despite mortgage rates remaining above 6%, buyers continue to stay active, suggesting that housing demand is gradually improving as the market moves through 2026.
I spoke with homeowners in Los Gatos, there was this common worry. They sort of assumed that higher mortgage rates would cut buyer activity a lot, and also make moving more difficult overall. But, the current information actually points another way.
A lot of buyers are still moving ahead, mostly because of family needs, job shifts, or lifestyle targets. Sure, the market isn’t drifting as fast as it did in previous years, yet demand still feels stronger than it did in 2025.
Why Are Home Prices Still Falling in 2026?
Data shows the national median listing price declined 2.4% year over year in May 2026, even as buyer activity improved and pending sales increased. This reflects how home prices often respond more slowly than other market indicators, especially after periods of significant inventory growth.
This is where a lot of sellers get kinda mixed up. If buyers are out there shopping more, why aren’t prices just jumping up already? Well the thing is, pricing usually answers slower than other signals in the market. Last year’s inventory expansion is still lingering around, shaping today’s price moves, even while demand is improving bit by bit.
Pro Tip
Focus on the complete market picture, not just home prices. Sales activity, inventory levels, days on market, and mortgage rates often reveal important trends before pricing catches up.
What Are Current Housing Market Trends Telling Us?
Data from the National Association of Realtors shows existing-home sales have remained relatively stable despite ongoing affordability challenges. These conditions suggest a market that is gradually finding balance, though mortgage rates remain an important factor to watch through the summer.
For buyers and sellers across the Silicon Valley, today’s market is less about grabbing the perfect moment on cue, and more about really seeing what is happening right now. Homes are still selling, inventory is staying pretty steady, and buyers continue to be involved, not exactly hesitating.
The biggest sticking point is mortgage rates. For now though the numbers point toward a market that is slowly getting better, even if price stabilization may take a bit more time than we’d like.
Looking Beyond the Headlines
Today’s market feels like a reminder that no single statistic really tells the whole story. While mortgage rates are still on the higher side and home prices are still sort of calibrating, buyer activity has improved compared to last year. Figuring out how these trends work together can help you make more informed real estate choices.
If you’re asking yourself what these market conditions mean for your own timeline, I’m glad to help add some real perspective. My goal is to make sure you feel informed, backed up, and quietly confident every step of the way—because buying or selling a home should feel like The Most Supported Move You’ll Ever Make.